Complete Study Guide: Microeconomics (ECO101)
**Course:** ECO101 - Microeconomics
**University:** Harvard University (Applicable to other universities)
**Tags:** #Microeconomics #EconomicsNotes #SupplyAndDemand #MarketStructures
#ExamPrep #StudyGuide #ECO101
1. Introduction to Microeconomics
Microeconomics studies how individuals, households, and businesses make decisions about
resource allocation, production, and consumption. It focuses on market mechanisms that
influence prices, supply, and demand.
2. Demand and Supply
Law of Demand
The law of demand states that, all else being equal, as the price of a good increases, the
quantity demanded decreases, and vice versa.
Law of Supply
The law of supply states that as the price of a good increases, the quantity supplied
increases, assuming all other factors remain constant.
Market Equilibrium
Market equilibrium occurs when quantity demanded equals quantity supplied, leading to a
stable price level.
3. Elasticity
Price Elasticity of Demand (PED)
PED measures how responsive the quantity demanded of a good is to changes in its price. It
is calculated as:
PED = (% Change in Quantity Demanded) / (% Change in Price)
Price Elasticity of Supply (PES)
PES measures how responsive the quantity supplied is to changes in price. A higher PES
indicates that supply is more responsive to price changes.
4. Market Structures
Perfect Competition
Characteristics:
• Many buyers and sellers
**Course:** ECO101 - Microeconomics
**University:** Harvard University (Applicable to other universities)
**Tags:** #Microeconomics #EconomicsNotes #SupplyAndDemand #MarketStructures
#ExamPrep #StudyGuide #ECO101
1. Introduction to Microeconomics
Microeconomics studies how individuals, households, and businesses make decisions about
resource allocation, production, and consumption. It focuses on market mechanisms that
influence prices, supply, and demand.
2. Demand and Supply
Law of Demand
The law of demand states that, all else being equal, as the price of a good increases, the
quantity demanded decreases, and vice versa.
Law of Supply
The law of supply states that as the price of a good increases, the quantity supplied
increases, assuming all other factors remain constant.
Market Equilibrium
Market equilibrium occurs when quantity demanded equals quantity supplied, leading to a
stable price level.
3. Elasticity
Price Elasticity of Demand (PED)
PED measures how responsive the quantity demanded of a good is to changes in its price. It
is calculated as:
PED = (% Change in Quantity Demanded) / (% Change in Price)
Price Elasticity of Supply (PES)
PES measures how responsive the quantity supplied is to changes in price. A higher PES
indicates that supply is more responsive to price changes.
4. Market Structures
Perfect Competition
Characteristics:
• Many buyers and sellers
